Business entities in Spain in 2023

Healy Consultants Group will assist our Clients with Spain business setup after advising the optimum corporate structure for their Firm. Our services in Spain include i) Spain company incorporation, ii) government license registration, iii) corporate bank account opening, iv) employee recruitment, v) visa strategies and vi) office rental solutions.

Click the link headings below to read detailed, relevant, up to date information:

• The Spanish Limited Liability Company (Sociedad de Responsabilidad Limitada)

  • This is the most commonly used entity for starting a new business in Spain. A Spanish LLC must appoint 1 director and 1 shareholder, who can be of any nationality and residence;
  • The minimum share capital required is €3,000 that needs to be paid in before company formation.

  Best uses for a Spanish Limited Liability Company: this type of business structure is ideal for small and medium sized businesses.

  Healy Consultants also offers ‘ready to use’ registered companies with paid-up capital, directorships and corporate bank account. The shelf company is operational within 24 hours.

• The Spanish Public Liability Company (Sociedad Anonima)

  • This business entity is recommended when the stakeholders intend to publicly list the company. Such structure requires a minimum capital of €60,000, 25% of which needs to be paid up at the time of incorporation;
  • The minimum required appointments include 1 director and 1 shareholder, who can be of any nationality;
  • To give your company a marketing edge, Healy Consultants recommends our Clients establish a Spanish PLC instead of an LLC. In Spain, it is not necessary for a PLC to list on the stock exchange. Furthermore, it is not mandatory for a PLC to submit an internal audit.

  Best uses for a Spanish Public Limited Company: larger corporations prefer to register a PLC in Spain in order to quickly and efficiently increase their pool of investments.

• Branch Office (Sucursal)

  • Spanish corporate law allows a branch office to be 100% foreign owned, and its scope of operations is defined by the parent company;
  • The branch office is allowed to have an independent management team and operate corporate bank account based in Spain;
  • In addition to the corporate taxes, Spanish branches face an additional branch remittance tax of 19%;
  • Branches are formed by a public deed which must be registered at Spain’s Mercantile Registry;
  • It is mandatory for a branch of a foreign company to appoint a resident individual or entity as the legal representative to the tax authorities;

  Best uses for a Spanish branch office: Financial conglomerates, such as banks, prefer to register a branch office in order to consolidate their profits globally.

• Representative office (Oficina de representacion)

  • While the Spanish representative office can be 100% foreign owned, this structure is not allowed to engage in direct sales within Spain;
  • Consequently, the representative office in Spain can only engage in i) market research and ii) promoting the business and services of the parent company.

  Best uses for a Spanish representative office: Before setting up a new company from zero in Spain, many investors prefer to explore the market and engage in promotional activities via a representative office.

• The Spanish free trade zone company

  • Free trade zones in Spain allow businesses involved in manufacturing and export trading to benefit from the multiple investment incentives rolled out by the government;
  • The companies in these free zones are eligible for reduced corporate income tax rates, lower VAT rates, and exemption from paying duties;
  • The criteria to register an entity differ depending on the free zone, but they all have a minimum capital investment requirement and a minimum job creation requirement to secure a free zone license;

  Best uses for a Spanish free trade zone company: This entity is ideal to establish an export-oriented business in Spain and benefit from the EU trade bloc benefits.

• Table of comparison between Spain entities

  	Limited Liability Company	Public Limited Company	Branch Office	Representative Office
  Also known as	sociedad limitada	sociedad anonima	sucursal	oficina de representacion
  How long to set the company up?	3 weeks	4 weeks	5 weeks	5 weeks
  How long to open company bank account?	4 weeks	4 weeks	4 weeks	4 weeks
  Legal Liability	Limited	Limited	Unlimited	Unlimited
  Wholly Foreign owned	Yes	Yes	Yes	Yes
  Minimum paid-up share capital	€3,000	€60,000	0	0
  File annual tax return	Yes	Yes	Yes	No
  Tax Registration Certificate required?	Yes	Yes	Yes	No
  Recommended corporate Bank Account	Banco Santander	BBVA	Banco Sabadell	La Caixa
  Does our Client need to travel?	No	No	No	No
  Resident director required	No	No	No	No
  Resident shareholder required	No	No	No	No
  Minimum directors allowed	1	1	1	1
  Minimum shareholders	1	1	0	0
  Each shareholder and director must have a TIN	Yes	Yes	Yes	Yes
  Spain resident company secretary required	Yes	Yes	Yes	Yes
  Corporate shareholders allowed	Yes	Yes	Yes	No
  Corporate director(s) allowed	Yes	Yes	Yes	Yes
  Public register of shareholders and directors	Yes	Yes	Yes	Yes
  Spain Corporate Tax Rate	25%	25%	25%	0
  Annual financial statements required	Yes	Yes	Yes	No
  Statutory audit required	No	Yes	Yes	No
  Allowed to issue sales invoices	Yes	Yes	Yes	No
  Allowed to sign contracts	Yes	Yes	Yes	No
  Allowed to import and export goods	Yes	Yes	Yes	No
  Can rent an office in Spain	Yes	Yes	Yes	Yes
  Can buy Spain property?	Yes	Yes	Yes	No
  Can own equity in other Spain companies?	Yes	Yes	Yes	No
  Estimate of engagement costs	€	€	€	€
  Total Spain business setup costs in Yr. 1	14,789	15,989	15,889	13,239
  Subsequent annual costs (incl. accounting and tax fee)	3,900	3,900	3,900	3,900
  Sample Engagement fee Invoice	View invoice PDF	View invoice PDF	View invoice PDF	View invoice PDF